ACCA Pathways to harnessing emotional intelligence report PDF

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The Accountant’s Survival Toolkit for a Digital Future

Table of Contents Executive Summary

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1 Self-Knowledge

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2 Empathy

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3 Influence

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4 Resilience

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5 Learning

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6 Training

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7 Ethics

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8 Culture

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9 Governance

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Primary research taken from ACCA Global’s Professional Insight Report: Emotional Quotient in a Digital Age 05 November 2018

Executive Summary Mastering Your Emotional Intelligence

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There’s an elephant in the room. And you can’t afford to ignore it.

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ou might be wondering how you got here, or maybe you expected something different? The truth is, you’ve been set on a groundbreaking path. It’s one which is going to rewire your perspective and equip you with 9 critical guidelines that will safeguard your career and put you ahead of the curve. Advances in digital technology across the sector now require a more holistic skillset, one that functions beyond the technical. It’s fast becoming of great importance and critically, this skillset includes emotional intelligence. Think of it as an emotional quotient, or EQ, measured by one’s ability to respond emotionally to a changing, digital workplace. It’s now a more automated place, full of systems that make decisions based on preset parameters and beyond that, machine-learning and artificially intelligent (AI) systems that ‘think’ for themselves. Everything is becoming more flexible and decentralised, where a specific understanding of systems outside of the traditional accountant’s remit, such as blockchain and the associated ethical issues, are more vital than ever. In this evolving environment, what are the challenges for individuals at all levels of seniority and, as human-beings, how should we respond to this new world in order to remain relevant and ultimately keep our jobs? Of course, most people will have a sense of all of this. It’s likely that you’ve considered your response to the digital world. How it motivates you to think a certain way. To act a certain way. You’ve no doubt questioned how you interact with your network and how these interactions affect key elements of your psychology, aspects like motivation and trust. Nonetheless, there may exist a false illusion that being in touch with your ‘self’ compromises your judgement, because all that matters at the end

of the day is ‘the bottom line’. But nothing could be further from the truth. It turns out that emotional intelligence is the elephant in the room of the accountancy sector, and without EQ being front and centre, your business could be at risk. Therefore, the task is to build strategies that recognise and respond to this requirement. One definition of emotional intelligence is the ability to identify one’s own emotions, those of others, and learning how to manage and apply them to practical tasks. And in the most simple terms, your EQ is the framework by which you can achieve this. This means recognising the inherent value of your emotions within the context of your business role, something all the more relevant as our digital world flourishes. It goes without saying that the threat posed by new and disruptive technologies, is ever-present. There are certain tasks at which machines are just better. However, there are also aspects of the human skillset that are far more difficult to replace and it is these that will provide a competitive advantage. Building these EQ competencies into the accountancy profession, competencies which are hard for machines to replicate, is the leverage required to survive. Key to the development of one’s personal EQ is a concept known as a ‘growth mindset’; essentially the highlevel point from which improvement of all emotional competence is made. A prerequisite is the desire to work and improve, to place oneself in an environment that allows for change to happen. Experience matters and generally speaking exposure to specific situations allows for improvement to take place. Practice makes perfect, right? Naturally. But also choosing

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the right tasks is essential. And there are certain ones at which AI performs very well, almost certainly better than you. It’s these tasks which will be replaced imminently, those that require so-called ‘specific AI’. So, the main challenge is identifying aspects of the business which catalyse more effective human interactions, which could only be replaced by ‘general AI’ and which is still (thankfully?) some way from being developed to the extent it actually threatens to replace you. The main aspects of EQ can be generally defined as change-readiness, increased diversity, ethics and beliefs, cognition and learning, humanmachine interaction and shifting power. Change-readiness is the empathy needed to deal with technologyrelated job-losses and the strategies through which you can overcome the fear of change. Increased diversity means taking in the perspectives of a wider pool of stakeholders, made accessible through remote working and technology tools. Ethics and beliefs are the core structure through which an accountant’s decisions are made. Cognition and learning refers to the tools and willingness required to adapt to a fast-changing world. Likewise, human-machine interaction deals with many of these aspects; how we acquire new knowledge and disseminate it. And finally, shifting power relates to new governance structures, where the push and pull of different specialities demands that emotional influence plays a key role. Each of these categories are interconnected by 9 core competencies; Self-Knowledge, Empathy, Influence, Resilience, Learning, Training, Ethics, Culture and Governance. Read this paper, and you’ll be part of an exclusive-set; one that’s emotionally prepared for the future. Enjoy and good luck!

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Self-Knowledge ‘Temet Nosce’

You are your specialist subject. So never stop specialising.

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t was Socrates who famously taught the maxim “know thyself”. 2,500 years later, the world has changed but his advice remains as true as ever. It doesn’t matter if you’re a director, partner or executive fresh out of accountancy college, understanding how one’s emotions underpin one’s behaviour is vital to self-knowledge and professional development. Part of your EQ is that capacity to recognise the relationship between emotion and behaviour. How do I feel about myself? How does that affect other people’s perceptions of me? To what extent do my emotional responses govern my ability to learn, influence, teach and make ethical decisions? Because one of the main differences between us and machines is self-awareness. And it’s that self-awareness that defines our emotional competency. Without it, you’re no different to a machine. In this age of highvolume communications and transactions, being able to pick out a signal from the noise, to know one’s priorities, is a core skill. And in picking these priorities, you define the degree to which you want to specialise. After all, you are your specialist subject. But what does that mean? In the digital age, are you better placed to add value to your organisation by specialising in one area, or should you adopt a more generalist approach? Sure, this isn’t anything new. Your entire life, you’ve been making decisions about the type of information you wish to absorb, and what to ignore in favour of improvement in other areas. But in the context of a fastchanging, digital future, who survives? The specialist or the generalist? In answering this, two narratives emerge. On the one hand, with the threats and opportunities inherent to periods of such rapid change, natural evolutionary theory teaches us

that being able to adapt; to not get boxed in by one’s highly optimised, context specific skillset, is of serious importance. Maximise your responsiveness. React to the change and leverage it to your advantage. That is one approach you might wish to take. However, the alternate view is that trends in technology threaten to replace those that do not have a customised or bespoke element. And the keyword here is ‘element’. In essence, if it’s replicable, it’s automatable. So what specialties do you bring to the table that a machine would struggle to automate? Understanding a brief and outputting a tailored strategy. Being able to delegate and manage a team effectively. Creating new opportunities for growth outside of the existing knowledge-base or datasignals. It’s these intuitive skills that will best prepare you for survival in a digital future. Of course, your individual personality will define what suits you best; your skills and expectations in the long-term. Nonetheless, this all requires emotional competency and self-knowledge. And like any skill, it’s a muscle you need to constantly train in order to remain competitive. It’s not good enough to assume that these developments will occur passively. Like software, your psychology and self-knowledge require active updates. As an accountant, you receive a great deal of knowledge from multiple sources. Ultimately, your main skill is a sense of judgement. What’s the reason for this information? What’s the motive of the source? How do I read between the lines to create the best possible business outcomes?

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As professionals, self-knowledge is our defence mechanism. It’s the very root of survival, drawing on past experiences to determine how we can make better decisions in the present. Our belief systems are central to the protection of ourselves and our stakeholders. And in a fast-moving, digital world it’s more important than ever to keep this awareness present at all times. Even a faulty click can seriously cost a firm, both reputationally and financially. Therefore, at the heart of the entire theme is the concept of trust. It is, after all, one of the basest of animal traits. And it’s the refinement of that evolutionary instinct that reinforces one’s ability to survive the shifting, digital landscape of the accountancy workplace. There are undoubtedly circumstances under which humans prefer dealing with humans, rather than technology. It doesn’t matter which industry you observe, the same is true. In many instances, a customer is prepared to pay a premium for a product or service which is inherently human; something handmade, which could not be provided to the same standard of quality as a machine working alone. At the centre of this is whether or not we can entirely trust the automated technology we increasingly work alongside. Once again, self-knowledge determines the extent to which we give technology the benefit of the doubt. How do you interrogate the facts at an appropriate level? It’s only by evolving these traits of critical analysis, in combination with an understanding of one’s emotions and motivations to act a certain way, that will give you the edge in a fast changing digital world, and the ability to operate symbiotically with the changing infrastructure and processes.

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Empathy The Golden Rule

Emotional sensitivity is the compass leading to new opportunities.

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ou know it yourself. It’s something so fundamentally human, it’s easy to forget we’re doing it. In many ways it’s a need, one required to function correctly in our professional and personal lives. In fact, it’s only when describing fringe psychologies that the importance of human empathy really comes to the fore. It’s fundamental to the very fabric of society. Unquestionably, at present, it’s an ability that we hold exclusively over machines. Sure, you can program a computer to ‘feel’. Great advances have been made in the palliative care sector, to produce machines that cast the illusion of empathic sensitivity. But this is ‘specific AI’ to that field. From a general business perspective, it’s untapped territory, making it a critical advantage as we enter a more machineoriented workplace. And when you get under the skin of the issue, it’s clear to see that such qualities in a company’s staff, regardless of seniority, directly benefits the firm and secures its future success. It’s not just about how you manage your clients. It’s also about company culture and it’s one of those issues which can really affect the bottom-line. As we age, the belief that we can sense how others are feeling without any verbal signals improves consistently. And it stands to reason. When you were a child, it’s highly likely you only cared about your own demands. You had a much lower EQ. The world around you, according to you, was tailored to meet your needs and rarely would the needs of others come into play. Your ability to empathise improved with age, as you learned that in order to get what you want, you also have to cater to others. And really, that’s how business works. A good salesperson has a strong degree of empathy; they seek to achieve the outcomes of their client, rather

than focusing on their own commercial gain. Only in doing so will they achieve success. And the same principles are true in the accountancy sector. To an extent, we’re all salespeople in the workplace. Whether it’s selling a new idea, supplier or strategic agenda, we need to understand the motivations and feelings of others in order to achieve those aims. In essence, what you’re managing is your sense of compassion. To what extent can you put yourself someone else’s shoes, no matter who they are and where they sit in the business, in order to maximise the relationship and create value. Of course, when training accountants, one of key learnings is the ability to tailor your communications to a specific audience. The media industry works like this every day, as per the expression “give the reader what they want”. Target your communications effectively, and you’ll sell more of whatever it is you’re selling. It sounds intuitive, but like many other elements of your personality, it requires training to stay at an executive level. It’s the stuff of success, the knack of influencing decisions by understanding who it is you’re addressing, and why they are likely to follow your particular course of action. It’s a subtle art. Try to overdo it and you’ll fail. Your audience is sensitive and can easily detect insincerity. But get it right, through a process of understanding and genuine engagement, and the rewards are there. It’s about trusting your own intuition to respond correctly in a particular set of circumstances. Take self-employed members of your business. It may even be yourself as you read this. Self-employed workers in the accountancy sector rank highly when it comes to this sense of empathy and compassion. These individuals

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operate in a highly entrepreneurial way, so responding to non-verbal signals from clients is critical. As with the SelfKnowledge section of this paper, it’s about generating trust, and through trust comes value. With a lack of formal procedure, they must respond to all available signals in order to achieve the client’s outcomes client. From the moment they walk through he door, striking the right tone according to the workplace environment is key. This is something that machines can’t do. Yet. There are semantic algorithms being built that can respond to particular audience types in real-time, but to do this with the lightness of touch required in reality is still very much a human ability, and one which is critical to an increasingly automated workplace. Likewise, those working on a permanent basis in large organisations must take on the perspectives of a wide group of stakeholders. Irrespective of seniority, having the emotional competence to lead; to understand one’s priorities in relation to others, is of fundamental significance. As described in the Executive Summary, it’s a ‘growth mindset’. One’s sense of empathy, and the willingness to improve that sense, equates to one’s levels of influence. As an accountant drives multiple, complex stakeholder interactions in the new digital age, reinforcing these types of positive feedback loops, and avoiding the negative ones, is a priority. Ultimately, emotional sensitivity is the compass leading to new opportunities. At a human level, demonstrating warmth and understanding, and recognising the fears and motivations of others, is how you win trust. It’s how you find new business, keep your staff, and maintain a healthy outlook which supersedes the ubiquitous digital agenda within our profession.

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Influence

The Art of Persuasion

Strong leadership and negotiation means using the whole toolbox.

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hen we think of making persuasive arguments, it’s often the use of rationality; facts and figures, which leads us to success. And of course, these factors have a part to play. But less common by far is the emotional factor, your use of EQ. The question is, are you undermining your influence by inadequately recognising the potential of emotions and associated factors? In the accountancy sector, many influencing styles harness rationality. After all, it’s a numbers game and a deeply analytical one at that. But, in not using emotive elements, are you leaving ‘value on the table’? Today, there’s no shortage of rationality. In a digital world, we’re surrounded by data. Whatever the metric, you can trace it, package it and pull it apart, and there’s no shortage of tools to help. And it’s true that data is an excellent, objective point from which to frame a question. Did X lead to Y? Sure, and I’ll prove it. Yet at the highest levels of influence, you still need to drive an emotional response from the parties involved. It’s not enough to deliver raw data without making it human. The notion of ‘death by PowerPoint’ speaks to exactly this phenomena; an inadequate framing of the agenda in a sufficiently human way. Today, sports journalism is already written by machines. A lot of the data within these texts is formulaic, but machines are getting better at giving the impression of emotion, based on preset parameters. The same goes for music, art and even poetry. Indeed, for the last 10 years computer programs have come into existence that make it very difficult to determine if a seemingly subjective piece has any sense of ‘self’ at all. What’s more, the machines are improving at an astounding rate. And their prevalence is only going to increase across all aspects of our culture. Their impact will be vast.

As accountants, we’ll be interacting with them a lot more, and they have the potential to influence elements of our profession beyond aspects of calculation and analytics. Therefore, it will become increasingly important for the professional accountant to essentially act as a gobetween, an enabler for these types of computer-human interactions. In effect, accountants will become translators. They will need to manage how these interactions occur and are consequently interpreted. And getting this right will be paramount, influencing stakeholders in the correct way to ensure the intended outcomes occur. It appears that within the next-generation digital workplace, accountancy will need to shift the emphasis of power from harder, more fact-fuelled influencing styles to softer, more emotive ones. With the introduction of more advanced AI, hierarchies of control are set to be somewhat flattened, and those with the ‘growth mindset’ to adapt and improve will find themselves using increasingly novel ways to challenge the status quo. Leveraging your human qualities in the face of extremely efficient machines and data-analysis software will be one way to achieve this, the ability to put forward an alternative point of view in order to drive emotional engagement. The accountant will be required to inspire, rather than simply calculate. We will be asked to act as the interface for a new wave of computing, humanising data in order to achieve highly specific aims. And if this sounds like a tall order, it’s not just freshly trained gradu...